At Britain's newer car plants, expansion goes on

Ford's announcement that car production is to end at Dagenham and the rescue earlier this week of Rover's Longbridge plant creates the impression that the British motor industry is teetering on the brink of collapse.

In fact, the picture is a good deal more mixed then the overwhelmingly negative headlines might suggest. For every car manufacturer cutting back capacity or pulling out of the UK altogether, there is another one expanding production and taking on more staff.

Last year, UK car production reached its highest level since 1972. But the big difference between now and then is that two-thirds of the 1.8 million cars made here in 1999 were exported. The renaissance of the British motor manufacturing industry has been led by the Japanese. Between them, Nissan, Toyota and Honda are now producing almost 700,000 cars at their UK "transplant" factories and that figure is set to rise.

Nissan has just begun production of a third model, the Almera, at its Sunderland plant, taking production to 330,000 this year. The replacement for the Primera, due out in 2002, will also be built in the UK as part of a £200m investment programme.

Honda, meanwhile, recently announced that its Swindon plant is to start making its CR-V four-wheel drive utility vehicle. By the time a £130m investment in a new small car is complete next year, Honda will have spent £1.15bn in the UK, making Swindon its biggest European plant with 4,000 employees and a capacity of 250,000.

Nor is it just the Japanese who are continuing to invest. Vauxhall, part of the world's biggest car maker, General Motors, last week unveiled plans to spend another £189m at its three UK car and van plants, safeguarding 12,000 jobs. Included in the announcement was a commitment to build the replacement for the Vectra at Vauxhall's Luton plant.

The French-owned Peugeot is also expanding, creating another 900 jobs at its Ryton factory in Coventry to cope with increased demand for its 206 range, while Volkswagen intends to spend up to £500m in the UK to increase production of the Bentley.

Even Ford itself is expanding in areas of the country other than Dagenham. This year Jaguar, bought by Ford in 1989, will make almost 100,000 cars at its two Midlands plants and by 2002, when the new baby Jag, the X400, goes into production at the Halewood plant on Merseyside, output will reach 200,000.

This surge in investment is partly explained by the UK's open and unregulated labour markets, which have made it cheaper and easier for car makers to set up here.

Unfortunately, those same factors also make it easier to close down capacity and shed workers.